TGIF: Commercial real estate and pot!

This article was published on: 01/18/19 6:43 PM

2019 will be an unprecedented year in Metro Vancouver for commercial and industrial real estate with the office sector leading the pace. The perfect storm combines some of the lowest vacancy rates in north America, record high prices and sustained development. Even though 1.6 million square feet of new offices are currently under development downtown, most of this space is already claimed!

Commercial lenders are however more conservative this year, looking for familiar names with experience in executing projects. They want to efficiently transition from non income supporting portfolios to construction portfolios in record time. Strata pre sales are a key element with repayment on the mortgage at construction stage. Lenders are now looking for higher presale requirements to prove financial viability of the development.

High density residential sites with an often large commercial component continue against all odds to sell at staggering prices. Most recently a 35,580 sq.ft. high rise zoned residential parcel in Burnaby’s Metrotown sold at $43.2 million.

Meanwhile the much anticipated marijuana industry is floundering under conflicting and confusing government regulations and laws. Why not close down the experienced long term successful pot shops in favour of opening new government outlets with insufficient supply? The black market received an unexpected windfall!

Remember if you have a licence to grow marijuana at home, avoid growing it in the house. Because of resulting mould, the banks currently won’t touch financing a home where plants have been/ or are growing. This could change over time, but right now there are no exceptions to the bank rules with regard to growing marijuana.

Meanwhile in our world, we saw more people out viewing our open houses last weekend and making offers on the well priced properties – a good sign. With Chinese New Year around the corner our Asian clients are looking for good fortune this year and shopping for a new home at this propitious time.
Always with our umbrellas and advice at the ready we have you covered for all things real estate. Let us help you navigate an interesting market in order to reach your goal.

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